Mr. Robert A. Kadane, President of KFG Resources Ltd., announced today that the Company's subsidiary, KFG Petroleum Corporation, will participate with industry partners in the drilling of two wells, the Ransom 16-1, Comanche County, Kansas, and the Adelhard 1-12, Barber County , Kansas.  The estimated cost to the Company for the drilling and testing these wells is US$19,000 for the Ransom well and US$8,500 for the Adelhardt.  The Company has a 9.7% working interest (7.88% net interest) in the Ransom and an 8% working interest (6.6% net interest) in the Adelhardt. Both wells are significant stepouts from existing production and may be classified as 'wildcats'.

The Company's common shares are listed on the TSX Venture Exchange, Vancouver, B.C., trading symbol "KFG".  For additional information, please contact Mr. Robert A. Kadane, President, at (303) 825- 7080.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release."